GameStop reported net sales of $1.164 billion for its most recent quarter.
GameStop’s new CEO did not waste any time in throwing down the hammer — or outlining what he thinks is needed to keep the ailing company afloat.
In his first email to corporate staff and store leaders, billionaire investor Ryan Cohen, whose takeover of the company was completed when the board named him CEO on Sept. 28, said GameStop’s survival demands “extreme frugality” and that the company has no use for “delegators and wasters.” The news was reported by various media outlets, including CNBC, which obtained a copy of the email (see below).
“It is not sustainable for GameStop to operate a money losing business,” Cohen said in the email. “The mission is to operate hyper efficiently and profitably.”
Cohen, whose investment firms holds a 12.09% stake in GameStop, is not taking a salary as CEO. In the email, he said that “extreme frugality is required” and that every expense at the company “must be scrutinized under a microscope and all waste eliminated.”
“I’m not getting paid, so I’m either going down with the ship or turning the company around,” Cohen said.
For its most recent quarter, ended July 29, GameStop cut its loss to $2.8 million from a loss of $108.7 million in the year-ago period. Net sales inched up to $1.164 billion, compared to $1.136 billion in the prior year.
Here’s Cohen’s full email to GameStop employees, as reported by CNBC:
Subject: Survival I will be straight to the point. It is not sustainable for GameStop to operate a money losing business. The mission is to operate hyper efficiently and profitably. Our expense structure must allow us to endure any adverse scenario. Whether it’s a difficult economy or revenue deceleration from shrinking software, we must be profitable. Our job is to make sure GameStop is here for decades to come. Extreme frugality is required. Every expense at the company must be scrutinized under a microscope and all waste eliminated. The company has no use for delegators and money wasters. I expect everyone to treat company money like their own and lead by example. Prospering in retail means survival. If we survive, we stay in the game. Survival is avoiding the deadly sins that often lead retailers to self-destruct. This is usually a result of the following — buying bad inventory, using leverage, and running expenses too high. By avoiding these self-inflicted mistakes and focusing on the basics, GameStop can be here for a long time. I expect everyone to roll up their sleeves and work hard. I’m not getting paid, so I’m either going down with the ship or turning the company around. I much prefer the latter. It won’t be easy. Best of luck to us all. Ryan